In a scenario where BA initially rejects a claim and then subsequently pays out on that claim when presented by (eg) Bott & Co, would there be any merit in lodging a small claim to recover the deducted fees from BA?

You couldn't then use MCOL to enforce that since the basic intent of MCOL is to operate with legal costs retained by each side. At least on paper those who have used Bott & Co could have done it themselves through MCOL and in theory would have got the same result. However it would be interesting if CEDR had previously sided with BA and then the courts disagreed, since in that scenario CEDR would have got it wrong.